Several of Friday’s newspapers report that Theresa May is expected to increase the NHS’s budget by between £4bn and £6bn a year. She is keen to mark the the health service’s 70th birthday on 5 July with a settlement that could see the budget rise by about £20bn by the end of this parliament in 2022.
So is it a done deal?
No, not yet. Despite the reports negotiations involving May, Jeremy Hunt, the health and social care secretary, and Philip Hammond, the chancellor, are not over, senior Whitehall sources said.
The fact the reports contain different versions of the exact sums of extra money the NHS in England would receive, and the percentage increase in its budget, indicates that the details are yet to be finalised.
However, if a final agreement can be reached in the meantime, the prime minister is almost certain to appear on the BBC One’s The Andrew Marr Show on Sunday to officially unveil the plan.
How big could the rises be?
The Daily Telegraph says the NHS will get an extra £4bn a year, the Sun says £5bn, while the Financial Times says “up to £6bn”. Whatever happens, the sums will be significant.
What has led to the proposed funding plan?
Since last year Hunt has been arguing two things: firstly, that, after eight years of 1% budget rises, the NHS needs to start receiving significant extra funding as soon as the economy allows; and secondly, that the service needs a long-term funding plan and the recent policy of small increases and in-year injections of extra, in effect “winter crisis” emergency funding, needs to end.
Q&A What are the financial pressures on the NHS that have built up over the last decade?
Between 2010-11 and 2016-17, health spending increased by an average of 1.2% above inflation and increases are due to continue in real terms at a similar rate until the end of this parliament. This is far below the annual inflation-proof growth rate that the NHS enjoyed before 2010 of almost 4% stretching back to the 1950s. As budgets tighten, NHS organisations have been struggling to live within their means. In the financial year 2015-16, acute trusts recorded a deficit of £2.6bn. This was reduced to £800m last year, though only after a £1.8bn bung from the Department of Health, which shows the deficit remained the same year on year.
Will some of the rise come from a ‘Brexit dividend’, as the Telegraph says?
Not exactly. Last November Simon Stevens, the chief executive of NHS England, told ministers the NHS needed to start receiving 4%-a-year budget increases as soon as possible, given the service’s increasing inability to meet key patient treatment waiting times and desire to make real progress in key areas, such as cancer, mental health and primary care.
He also in effect demanded the government deliver on the promise made during the EU referendum campaign that Brexit would free up £350m a week extra for the NHS.
Since then leading leavers, including Boris Johnson and Jacob Rees-Mogg, have called on May to honour that pledge, even though it was not a government promise and was not in the Conservative manifesto last year.
Why does Stevens see rises of 4% as so important?
It’s not justthe NHS chief that backs that figure as the minimum the service needs to cope with the rapid increase in demand for care and also to transform how it works. Health thinktanks, organisations representing NHS providers and almost every group representing doctors back the annual 4% rise as do influential independent bodies such as the Institute for Fiscal Studies and the Office for Budget Responsibility.
Also, although the NHS has received rises averaging 3.9% a year since 1955, that has slowed to just over 1% a year since 2010.
Recent research by the IFS and the thinktank Health Foundationshowthe NHS’s average annual increase since its creation in 1948 has been 3.7%. The last eight years represent a period of unprecedented austerity, in relative terms.
In cash terms, 4% annually over at least four years would mean the NHS’s budget of £125bn increases to more than £146m by 2022.
How did all this lobbying influence May’s thinking on the NHS?
A: In March, when she addressed the Commons liaison committee, May committed to giving the NHS a multi-year funding settlement, though gave no more detail.
Both Hunt and Stevens have talked about the health service’s need to have certainty that it will receive substantial extra funds for the next 10 years. However, it is likely the deal will give the NHS specified, guaranteed increases only until the end of this parliament.
Why was May’s commitment to a long-term plan important?
It came a day after 92 MPs from all parties, including many select committee chairs, told the prime minister in a strongly worded letter that the NHS needed to get back to receiving the sorts of annual budget increases that it enjoyed until the coalition’s austerity programme began in 2010.
Her pledge intensified a behind-the-scenes battle between Hunt and Hammond over exactly how much money the NHS should get. Hunt has been pushing for the rise to be as close to 4% as possible, whereas Hammond initially said anything above 2.5% was unaffordable.
The fact that it looks like the final increase will be at least 3% a year suggests that Hunt has had significant success in the battle for May’s ear. He has warned her that the increasingly visible problems in the NHS – including the biggest winter crisis last year, deepening understaffing and the inability to meet A&E and cancer treatment targets – will only intensify without a radical rethink in the government’s approach to the the service, and that would carry obvious political risk.
But Hammond seems to have gained more control of the process as the announcement has drawn close. Hunt is now concentrating his lobbying on the chancellor, not May.
What will the new money be spent on?
On Thursday Hunt told the annual conference of the NHS Confederation that, whatever the sum, it would be used to deliver “a small group of bold ambitions”, including new waiting time targets for mental health care, improve Britain’s poor cancer survival rates, make maternity care safer and complete the government’s declared mission of integrating health and social care services in England.
Where will all this extra money come from?
No one knows yet. Hammond will set that out in his next budget, in November. There will also be a new, detailed plan for how the NHS will spend the money – the improvements it will make in return for May’s largesse – around the same time.